The direct vacancy rate also fell, from 6% in second quarter 2002 to 14.8% in the same quarter this year.
The decreases are due to new space in the market, as well as relocations--and the submarket's past success, Maggie Guajardo Kurtz, director of office brokerage for Cushman & Wakefield of Florida Inc. in Miami, tells GlobeSt.com.
Included in those factors was the repositioning of Mayfair in Coconut Grove, which added a significant amount of office space to what was previously all retail. In addition, Grand Bay Plaza and SBS Tower had vacancies after tenants relocated, according to Kurtz. And while Mayfair contributed to the higher overall vacancy rate in the submarket, it is a positive thing because it's adding new space, she adds.
Coconut Grove has been a "highly sought-after submarket," experiencing 95% and above occupancy levels for years, she says. What that has done is taken that submarket off the call list for prospective tenants looking for space. "For many years, it was known as a great submarket, but with no vacancy."
Now, however, "there's a heightened interest back in Coconut Grove, which had at least seven availabilities of 10,000 sf or greater as of early July, Kurtz says.
"The Coconut Grove area has historically been one of the healthiest in Miami," Tony Puente, associate director of Insignia/ESG, who oversees leasing and marketing of SBS Tower, said in a recent statement. "Over the last 18 months, there has been a trend of increased availabilities within the submarket. Ironically, this is in part due to its own past success.
"There has been some movement out of the area to submarkets that offer greater space alternatives with more competitive rental rates," Puente said. "For example, for the first time in several years, we have a full floor available at SBS Tower. This 14,633-sf space is highly desirable, as Coconut Grove has historically had no class A full-floor availabilities."
Despite the increased vacancy rates, Insignia/ESG Inc., a global commercial real estate services provider, handled several lease deals in the first six months of this year at SBS Tower, located at 2601 S. Bayshore Dr.
"SBS Tower has continued to witness high levels of interest from tenants within the marketplace," according to Susan Thomas, associate director of Insignia/ESG. "The completion of eight deals for the first six months of the year highlights the strong demand for the building within the marketplace." Both Puente and Thomas represented the property owner, Irradio Holdings.
Included in the transactions at the 14-year-old property were West Indies Fruit renewal of its 3,440-sf lease, Rubino, Golembe et. al renewal of its 4,548-sf lease, Mortgage Inc. renewal and expansion of its 3,861-sf lease and Palm Ranch Holdings Ltd. signing of a 2,491-sf lease.
The 320,000-sf SBS Tower includes 21 floors and 294,000 sf of office space. Other tenants include Oppenheimer, Terremark Worldwide, Spanish Broadcasting System and Bermello, Ajamil & Partners Inc.
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